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Point Estimation

# Point Estimation

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In point estimation, an educated guess is made, on the basis of sample data, as to the unknown value of the population parameter.
In point estimation, an educated guess is made, on the basis of sample data, as to the unknown value of the population parameter.

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03/01/2014

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Statistics

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The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not forsubmitting the same in lieu of their academic submissions for grades.
Subject: Statistics

Point Estimation
When engaged in interval estimation, a researcher will1.

Select a level of confidence (e.g., 95 percent),2.

Analyze the sample data,3.

Extract a number out of a statistical table, and4.

Scientifically build an interval that surrounds the sample statistic. After completing these four steps, the researcher makes an educated guess as to the unknown valueof the population parameter. In making this guess, the researcher ends up saying,
“
My data-based interval extends from ______ to ______, and the chances are ______ out of 100 that this interval is one of the many possible intervals (each based on a different sample) that would,in fact, and contain the parameter between the interval limits.
A second form of estimation is called point estimation, and here again, an educated guess is made,on the basis of sample data, as to the unknown value of the population parameter. With this secondkind of estimation, however, the activities and thinking of the researcher are much simpler. Withpoint estimation, no level of confidence must be selected, no statistical table must be consulted,and no interval must be created. Instead, the researcher simply computes the statistic on the basisof the sample data and then posits that the unknown value of the population parameter is the sameas the data-based number.Thus, the researcher who uses this guessing technique ends up saying,
“
Because the sample-based statistic turned out equal to ______, my best guess is that the value of the parameter is alsoequal to that particular value.
Point estimation, of course, is likely to produce statements thatare incorrect, Because of the great likelihood of sampling error; the value of the statistic rarely matches the value of the parameter. For this reason, interval estimation is generally considered to

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The Homework solutions from Classof1 are intended to help students understand the approach to solving the problem and not forsubmitting the same in lieu of their academic submissions for grades.
Subject: Statistics

represent a more logical way of making educated guesses as to parameter values than is pointestimation. Despite the fact that point estimation disregards the notion of sampling error, many researchers can be seen making pinpoint guesses as to parameter values. Although the likelihood of sampling error causes the practice of point estimation to seem quite ill-founded, this form of statistical inference deserves to be respected for two reasons. These twosupportive arguments revolve around:1.

The role played by point estimation in interval estimation and2.

The reliance on point estimation by more advanced scientific disciplines (such as physics).
Let’s consider each of these reasons why it is unwise to look on point estimation with complete
disrespect. When engaged in interval estimation, the researcher builds a CI that surrounds thesample statistic. Point estimation is relied on in two ways when such intervals are constructed.First, the pinpoint value of the sample statistic is used as the best single estimate of the populationparameter. The desired interval is formed by adding a certain amount to the statistic andsubtracting a certain amount from the statistic. Hence, the value of the statistic, as a point estimateof the parameter, serves as the foundation for each and every CI that is constructed.